Abstract
While the direct effect of international tourism on economic growth has been widely studied, limited attention has been given to the macroeconomic conditions that moderate this effect. This study fills this gap by examining the moderating roles of foreign direct investment (FDI), internet access, exchange rates and trade openness on the tourism-growth effect across 41 Sub-Saharan African countries from 2007 to 2019. Using the two-step system Generalized Method of Moments estimation, the analysis utilizes two alternative measures of tourism: international receipts and arrivals. Results from the model using tourism receipts reveals an initially insignificant effect, which becomes positive and statistically significant when interacted with FDI, internet access and exchange rates. Conversely, the model that uses tourist arrivals shows a consistently positive and significant effect across both baseline and interaction-augmented specifications. Additionally, all interaction terms yield positive coefficients, except for trade openness, which is negative, highlighting the importance of complementary macroeconomic factors. These findings support the formulation of integrated policy frameworks that align tourism with investment, digital infrastructure and exchange rate strategies to maximize tourism-induced growth outcomes.
Impact statement
The article explores the moderation factors that condition the effect of international tourism on economic growth in Sub-Saharan Africa (SSA). The findings indicate that the tourism growth effect in SSA is amplified by higher levels of foreign direct investment inflows, technological advancement and a competitive exchange rate.
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